The Great Eight Challenges for CFOs

Today’s Chief Financial Officers (CFOs) face more challenges than ever before. Traditionally the CFO organization was called on to protect the company’s assets. This included closing the books and producing the monthly management reports, filing statutory financials, managing cash and treasury responsibilities and ensuring internal controls were in place. However, we’ve identified eight key challenges that are raising the game for today’s CFOs. Those who are not able or who are unwilling to focus on these “Great Eight” are finding themselves unable to meet the challenges facing their company and are opening themselves and their organization to risk.

1. Relentless Focus on Growth

CFOs must partner with the business to identify and shape growth strategies and opportunities. Providing advisory and decision support in regard to portfolio management, performance management, predictive analytics and advanced cost management are business imperatives.

2. Tech Spend & Trends

Large ERPs (i.e. SAP, Oracle) no longer have the flexibility and ease of use required by today’s business environment. Modern enterprise cloud applications (i.e. Workday) are leading the trend in system selections across all industries and non-profits. The understanding of SaaS vs On-Premise pros and cons is a CFO necessity.

3. Evolving Regulatory & Political Landscape

Enterprise risk management must now be a focal point for the CFO’s agenda in order to minimize the effects of risk on capital and earnings.

4. The Ever Evolving CFO Role

CFOs must continue to aggressively manage enterprise-wide costs while nailing the basics and finding innovative ways to improve overall enterprise performance and growth. CFOs must bring strong decision support and be the catalyst for enterprise growth and change in addition to their role as the financial steward.

5. Shrinking Finance / SG&A Budgets

CFOs must move beyond cost reduction to add value and think more broadly in terms of maximizing margins. Among the many roles of the CFO, one of the most important is maximizing margins. To do this, the CFO must determine if the situation is a growth/revenue opportunity, a cost reduction scenario or a combination of both. Once the opportunity is defined, the CFO can begin to move the needle by addressing foundational elements such as the operating model, process, technology and/or information.

6. Demand Flexibility & Information

CFOs must be flexible in addressing the demands on their organizations and the information they share. Today’s finance team needs to take the numbers to the next level – to understand the business impact, deliver a rock-solid analysis of business drivers and provide an educated outlook of the future vs. looking in the rear-view mirror at past results.

7. Finance Talent

CFOs and their finance teams must focus on earning a strategic “seat at the table.” Knowing how to access data and turn it into information is not enough for today’s finance and accounting professionals. It is imperative for finance and accounting to focus on building their softer skills. These include:

Written and verbal communication

Ability to influence others

Facilitation skills

Project management skills and techniques

8. Capital Spend Restrictions

CFOs must continuously identify investment opportunities that fulfill the firm’s strategy and goals and integrate capital allocation with corporate strategy. Too often the annual capital planning process encourages gaming. CFOs must establish thresholds for project approvals which incorporate a level of analysis based on project risk, a degree of discretion, and consideration of the investment management categories.

With the increased demands from the “Great Eight,” CFOs need to be organized leaders and strategically focus their internal finance and accounting organizations to meet these challenges. The CFOs who are getting this right, see their role as being a business advisor and are encouraging their teams to partner with other parts of the organization to solve for solutions that will keep their companies relevant. They are getting out from behind their desks and actively leading innovation sessions bringing business, IT and finance accounting staff together to harness the power of this combined knowledge to tackle the Great Eight.

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Ellen Griffith is the Global Head of North Highland's HCM and Finance software advisory services. She has over 25 years of experience in operational excellence, including both accounting/finance and supply chain transformations. Her expertise encompasses an extensive background in system selection and implementation of cloud and on premise financial systems, back office transformation, close improvement, controllership, and mergers and acquisitions. Her education includes a Bachelor of Arts degree in Accounting, a CMA certification, an MBA concentrating in Finance, and a CPIM certification.